Ivanhoe Cambridge JV Buys 49% Stake in Downtown Manhattan Property for $150M

Ivanhoe Cambridge has added to its New York City office holdings with the acquisition of a 49 percent stake in 330 Hudson in Manhattan for $150 million.

HUDSON

Ivanhoe Cambridge, the real estate arm of one of Canada’s largest pension funds, has added to its New York City office holdings with the acquisition of a 49 percent stake in 330 Hudson in Manhattan for $150 million.

The transaction is Ivanhoe Cambridge’s fifth acquisition with U.S. partner Callahan Capital Properties and brings their U.S. office platform investments to more than $2.1 billion. The deal was made through a joint venture with affiliates of Beacon Capital Partners. It comes about a month after Ivanhoe Cambridge sold its 49.4 percent stake in 388-390 Greenwich St. to JV partner SL Green Realty Corp. for $1.59 billion. SL Green used the proceeds of the sale to refinance the two-building property in TriBeCa for $1.4 billion.

For Ivanhoe Cambridge, the acquisition of 330 Hudson, a 16-story, 467,000 square-foot Class A office building in the Hudson Square submarket of Midtown South, is its fourth Manhattan office property. In October, Ivanhoe Cambridge purchased the majority stake in 1211 Avenue of the Americas, a 45-story Class A trophy near Rockefeller Center that is home to News America Inc., for $850 million from an affiliate of Beacon Capital Partners, which continues to own the minority interest.  It also owns 43.1 percent interest in 1745 Broadway, a 636,600 square-foot office building, and 49.9 percent interest in 1411 Broadway, a 1.2 million square-foot tower just south of Times Square.

“330 Hudson is a leading example of the creative work environment that is increasingly desirable to the growing technology and media industries in Hudson Square, which is one of New York’s most promising urban live/work neighborhoods,” Adam Adamakakis, executive vice president, U.S. investments, for Ivanhoe Cambridge, said in a news release.

“With its prime location and unique attributes, 330 Hudson has a very strong competitive position and we look forward to working with Beacon to further enhance value as we complete the lease up of the property,” Tim Callahan, CEO of Callahan Capital Properties, said in the release.

The LEED Gold pre-certified building, which has a historic stone and brick base, was recently redeveloped, adding eight new column-free tower floors. It also has ceiling heights of 11 to 17 feet as well as open and flexible floor plans, which appeal to creative and technology tenants who are seeking office space in the Midtown South submarket. The Cassidy Turley New York City Office Market Snapshot for First Quarter 2014 noted that the availability was particularly tight in Midtown South.

“All five submarkets had declines in the available supply, as the Midtown South availability rate dropped 130 basis points since the end of 2013 to 7.5 percent,” the report stated. “Demand for spaces greater than 100,000 square feet remains high in the market, as only seven blocks are available, the lowest in more than seven years.”

Cassidy Turley reported Q1 availability was 6.7 percent and rents for Class A office space in the Hudson Square/TriBeCa section of the submarket was $75.15 per square foot compared to the overall average of $72.50 for all the Midtown South neighborhoods.

Ivanhoe Cambridge has also been active in the Chicago office market. In December, the firm announced it had acquired twin office buildings, 10 and 120 Riverside Plaza, in the West Loop submarket in a partnership with Callahan for more than $360 million.

Adamakakis said his company hopes to “capitalize on more opportunities in key U.S. markets soon.”

Callahan added that the purchase of the stake in 330 Hudson “exemplifies our strategy to build a high-quality office platform concentrated in top markets around the country.”